Dwolla Allows Mobile Money Transfers Via Mobile & Social Media

Dwolla is a combination of the words "Web" and "Dollar." Just go into an empty room and say it out loud three or four times. It rhymes with "holla." Now that you've got the pronunciation part down, let's explore this nifty little application.

If you own a retail business, you know how check fees and credit card fees can add up. If you pay your bills by check or shop with credit or debit cards, an increasing percentage of the cost of the merchandise are those fees being passed on to you in the form of higher prices.

According to Ben Milne, the founder of Dwolla, the idea of his company is to "create an ideal financial transaction," that's convenient, fast and cheap for consumers to use. That concept includes saving retailers money by reducing the cost of exchanging money. Here's how it works:

The business or merchant sets up a Dwolla account so it is able to receive payments from people who use it. You can't receive Dwolla payments unless you have it set up in advance.

The customer also must set up a Dwolla account to be able to transfer money from a bank account or credit union account to another Dwolla user.

Once the accounts are in place, you can shop and pay online with Dwolla, use a free smartphone app (both the Droid platform and iPhone apps are available) to pay a retailer at the register in place of cash or plastic.

Business-to-business transactions are also possible, as well as invoicing using Dwolla. I never even knew this option existed until a web developer I work with sent me an invoice using Dwolla.

You can give people Dwolla dollars via social networks Facebook and Twitter as well. In fact, three separate individuals have given me a dollar each, which I have yet to retrieve.

The only fee per transaction is 25 cents, and it is paid by the receiver.

Milne thinks the time has come for an easily available and low-cost exchange system like Dwolla. The technology, ease of use and social media elements make Dwolla very attractive to young people, who are always connected via mobile phone. With a couple of keystrokes on a smartphone, the need to carry a wallet is gone. So far, Dwolla has thousands of registered users and has moved more than than $1 million in transactions.

On March 2, Dwolla gathered its friends and investors together at Cabaret West Glen to introduce its newest feature, "Dwolla Spots." Spots will allow Dwolla users to find places that accept Dwolla payments by seeing a map with retailer locations noted. Dwolla's founders think that users will appreciate users knowing ahead of time where they can use the cashless system. And Ben and his team make time to meet with their supporters and friends in person. Pictured here is Milne and Shane Neuerburg, also of Dwolla, sporting their cool new T-shirts.

Do you Dwolla? How long to you think it will take for this technology to go mainstream?

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